Rics reports that house price falls decrease slightly

Rics housing market survey published today indicated that the balance of Chartered Surveyors reporting house price falls decreased slightly in May

The RICS house price balance improved slightly for the first time in ten months but still remains a significantly depressed figure with 92.9 percent more Chartered Surveyors reporting a fall than a rise in house prices which is a decrease from 94.7 percent in April.

The survey highlighted that demand remains weak, with the balance of surveyors reporting new buyer enquiries still well down. However there has been a small revival with 51 percent more Chartered Surveyors reported a fall in buyer enquires compared to 69 percent in April.

The lack of new instructions to sell property continues to provide the market with some support in the near term. Large numbers of distress sales (either repossessions or sales from those attempting to avoid the repossession process) have not taken place. With mortgage arrears still low, until the worsening economic picture filters through into the employment situation, this lack of supply will prevent significant declines in house prices.

In fact the net balance of Chartered Surveyors reporting new instructions to sell property fell to -26 percent, the second lowest figure since the question was asked in April 1999.

Commenting, RICS spokesperson Jeremy Leaf said:

"While demand remains weak and housing transactions continue to evaporate, there is a very real danger to the wider economy. The property industry will not be the only casualty in the fall out from the credit crunch, with the high street and purveyors of a range of household goods, including furniture and white goods also feeling the pinch. Construction workers such as plumbers and bricklayers will start to see employment opportunities dry up as the pace of housing transactions continues to abate."

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